Deposits, Inspections and Appraisals

The Process, Step-by-Step

The Initial Agreement and Deposit.

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. Some important tips to keep in mind to streamline the process:

• Keep written records of everything. We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
• Stick to the schedule. Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process we and our Transaction Coordinator Lauren will keep you constantly updated, so you will always be prepared for the next step.

DEPOSITS

Here is North Carolina we have the option of making 2 deposits when making an offer. The first is the Due Diligence Deposit. This deposit is NON- REFUNDABLE! The check is made out directly to the sellers within 24 hours of your offer’s acceptance. The second deposit is the Earnest Money Deposit. This deposit is typically refundable as long as you withdraw your offer before the end of the due diligence period. Carolyn and Myron will go over these deposits and answer all of your questions in detail!

The Closing Attorney

An attorney will be selected as a closing agent. The closing agent will hold the earnest money deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.

How to Hold Title.

You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.

Inspections.

Once your offer is accepted by the seller, we can recommend inspectors and schedule those appointments, to inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). We can recommend several different inspectors. Depending on the outcome of these inspections, one of two things may happen:

1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price). HOWEVER, North Carolina is a buyer-beware state and the seller is not under any obligation to renegotiate.

Home Warranty

You will have the option of obtaining a home warranty on your new property. We would be happy to give you the names of some companies to contact.

Appraisal and Lending.

It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.

Association Approval.

If the property that you are purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. We will work with you to make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. If you are going to use this property as an investment property you will want written proof that this is allowed by the HOA. Property Insurance. If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property.  The value will depend on the lending institution and the purchase price of the property.  Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts. We will be happy to recommend experienced knowledgeable insurance agents for every property type.